- (1.) The facts of this case reminded us of what this Court observed in M/s. Guru Nanak Foundation v. M/s. Rattan Singh and Sons, (1981) 4 SCC 634 : (AIR 1981 SC 2075, Para 1) : "Interminable, item consuming, complex and expensive Court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940 ('Act' for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending proxility at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with 'legalise' of unenforseeable complexity. This case amply demonstrates the same."
(2.) The facts speak for themselves. The Board of Trustees, Madras port Trust, invited tenders in the year 1957 for certain works at the port. Clause (4) of the Instructions for tender stipulated that the tenderer is required to indicate clearly in the letter forwarding the tender any deviation from the conditions and specifications mentioned in the Instructions. Clause (7) provided that until a formal agreement was entered into, the tender together with the Board's acceptance thereof shall constitute the binding contract between the parties. The respondent submitted its tender on November 11, 1957 along with a letter specifying certain deviations. The main deviation suggested was that the thirty months period specified for completing the work shall be subject to such delays as are due to causes beyond their control. In case of such delays, the respondent claimed to be entitled to not only extension of time but also to compensation. It further specified that the Board should make available to it the requisite foreign exchange for importing the plant and machinery required for executing the work. Soon thereafter, it was realised by both the parties that foreign exchange would not be released to the respondent for purchasing machinery on its own account. The parties then agreed that the Board should import the said machinery on its own account and should hire it out to the respondent for execution of the said work. The respondent's tender was accepted by the Board on October 6, 1958. A formal contract was sent by the Board to the respondent for its signature. The respondent suggested several modifications and alterations which according to it were necessary to truly reflect the consensus arrived at between them. The modifications and alterations pertained mainly to the supply of imported plant and machinery and the spares. Certain correspondence passed between the parties but the Board refused to agree to any change in the draft agreement. On April 9, 1960 the respondent signed the agreement without incorporating the modifications suggested by it.
(3.) There were delays in importing the machinery. As against a period of about six months envisaged by the parties, it took about twelve months for importing the entire machinery. It was hired out to the respondent and it completed the work within the extended period, asked by it and granted by the Board. The total contract value was Rupees one crore and sixty three lakhs. After the work was completed, the respondent raised a dispute claiming additional amount on account of the delay in supplying the machinery and on certain other counts. It claimed a total amount of Rs. 14,93,654.78p. In terms of the arbitration clause contained in the contract, the respondent nominated Sri W. S. Krishnaswamy Naidu, a retired Judge of the Madras High Court as its arbitrator. The Board nominated another retired Judge of the Madras High Court, Sri Somasundaram, as its nominee. Since the arbitrators could not agree among themselves, they designated Dr. P. V. Rajamannar, retired Chief justice of the Madras High Court, as the umpire. The learned umpire heard both the parties, took the material adduced by them and made a speaking award on October 30, 1965.;